Protax is a professional tax preparation software for tax accountants. The cost of the software is $7000 per year using "pay as you go" pricing, so on top of the yearly subscription charge, protax charges $49 for every tax return submitted. Cornerstone Tax is a small tax accounting firm looking to purchase ProTax. They charge clients $400 per tax return. The variable costs will be $49 per return and their fixed cost will be $7000, which is the price of the software. They would like to perform prescriptive analytics to determine what inputs are needed to achieve certain goals. How many tax returns do they need to complete to breakeven?

Answer rating: 100% (QA)

To break even Cornerstone Tax needs to cover both their fixed costs the 7000 ... View the full answer